Columbus Dispatch sold to New Media Investment Group
Company that shed much of its debt through the Gatehouse Media bankruptcy continues roll-up strategy by acquiring paper that has been family owned for over 100 years
While newspaper veterans discuss the fate of their industry – is digital killing off newspapers or merely making the industry evolve – the private equity companies are moving in, a sure sign that the end is nigh.
Today, the Wolfe family, which has owned The Columbus Dispatch for over 100 years, announced that it had agreed to sell its Ohio newspaper to New Media Investment Group, a company, a holding company that emerged from GateHouse Media Inc. went bankrupt in 2013. The bankruptcy allowed the PE backed firm to dump much of its debt (at the time it listed assets of $433.7 million and debt of $1.3 billion) and continue its roll-up strategy.
“Despite all the technological upheaval, throughout most of the 20th century print newspapers remained the unquestioned news leaders in their communities, and most of them were family-owned,” publisher John F. Wolfe told readers today.
“In the last two decades, however, the unprecedented speed, breadth and depth of change affecting the newspaper industry redefined the fundamentals necessary for continued success.”
“After several years of operational adjustments and careful assessment of the factors influencing The Dispatch’s performance, we concluded the paper’s future success is most enhanced within a newspaper company that has both regional and national reach, as well as strong marketing and digital operations, providing the economies of scale essential for optimum efficiency,” Wolfe wrote.
New Media Investment Group certainly has reach. With this acquisition it now owns 126 daily newspapers. Yet the company is rarely thought of as a leader in the industry, likely because few really think the company will be around long as private equity backed firms tend to not hold onto their properties beyond five years.
What’s next for The Columbus Dispatch itself? Ask anyone who has worked at a PE-owned B2B magazine company.
As for the previous owners, they will be retaining their broadcast properties which include WBNS-TV, a CBS affiliate in Columbus, and WTHR-TV, the NBC affiliate in Indianapolis. This continues a trend we are seeing among publishers owning both print and broadcast properties, dumping print but retaining broadcast. Not a great endorsement for newspapers by the very people who are supposed to know the most about the industry.
NEW YORK, NY – June 3, 2015 — New Media Investment Group Inc. announced today that it has reached an agreement to purchase all of the publishing operations and assets of The Columbus Dispatch. The Columbus Dispatch has an extensive history serving Central Ohio, and currently has a daily and Sunday circulation of over 130,000 and 235,000, respectively.
“We are proud of the 110-year legacy of family ownership of The Columbus Dispatch, and the newspaper’s record of quality journalism and community stewardship”
Michael E. Reed, New Media’s President and CEO commented, “We are very excited to announce the proposed transaction to acquire The Columbus Dispatch, along with its weekly newspapers, magazines and distribution company. The newspaper, first published in 1871, is the sole daily newspaper in its market, and is the trusted source for comprehensive local news, politics, sports and entertainment coverage across Central Ohio. The newspaper has a deep rooted history providing quality journalism and has been named Best Daily Newspaper in Ohio by the Society of Professional Journalists multiple times, including in three of the last four years.
“The Wolfe family has owned and operated the newspaper for more than 100 years, and during their tenure they have made significant investments in the community as well as in the journalism efforts of The Columbus Dispatch. The paper is committed to providing proprietary, local content and unparalleled access to its markets for readers and advertisers. We deeply admire The Columbus Dispatch’s involvement in the community’s development under the stewardship of the Wolfe family, and we at New Media are proud to be the new owners of this business, and look forward to continuing their tradition.”
“We are proud of the 110-year legacy of family ownership of The Columbus Dispatch, and the newspaper’s record of quality journalism and community stewardship,” said Michael Fiorile, President and CEO of The Columbus Dispatch. “The decision to sell The Dispatch and its sister publications was extraordinarily difficult, but the past two decades of accelerating change in the newspaper industry made it increasingly clear that the best chance of preserving The Dispatch well into the future is to align it with a much larger and more diversified newspaper enterprise.”
New Media intends to fund the acquisition with a combination of cash on the balance sheet and an incremental $25.0 million on the Company’s existing term loan. New Media anticipates the deal will close in the second quarter of 2015 subject to customary closing conditions; however, there can be no assurance as to the timing or the occurrence of the closing. Terms of the deal were not disclosed.
Bulkley Capital, LP served as exclusive financial advisor to The Columbus Dispatch on the transaction.